Reseller hosting is gaining popularity as a great way to earn residual income with minimal effort, and everyday a new successful reseller hosting business established. Unfortunately, the majority of resellers fail to have any real success because they make elementary mistakes that could be avoided altogether. In fact, most reseller hosting plans provide all of the tools and resources needed to avoid these mistakes. Nonetheless, it is possible to create a hosting business that goes from reseller to datacenter status in just a couple of years, and by avoiding the following 3 mistakes you can maximize your chances of doing this.
Lack of Company Branding
The number one mistake made by novice resellers is the lack of company branding. In order to build a thriving hosting company you have to give your customers the impression that your business is independent and well established. This can be done by creating custom logos and slogans that set your business apart from the competition. If you fail to distinguish your company from your competitors then there is a high chance that your prospective hosting clients will look elsewhere, especially if you're unable to offer lower prices than the major hosting companies. Fortunately, many reseller hosting plans include tools that let you design custom control panels for your clients, equipped with your own logo and slogan. Small touches likes this, combined with a professional web site, are the best way to convince visitors that you're operating established hosting company.
Another common mistake relates to the misconception that many resellers have in regards to quantity versus quality. Instead of focusing on making a lot of money from one client, it is more ideal to make a little bit of money from each client and have a larger client base. Many resellers feel they have to charge exuberant prices in order to make the business worth their time. However, doing this will only lead to a small client base, and eventually even those clients will go elsewhere for lower prices. Thus, it is best to make a very small profit form each client, even if it means waiting longer for the residual income to build up. With that said, if you're creative enough it is possible to get away with charging high prices, if you're able to bundle your hosting plans with other web-based service like web design and search engine marketing.
Purchasing Small Plans
The final mistake to avoid is purchasing small reseller plans that do not offer a substantial discount for server resources. As in any other industry, with the reseller hosting, if you buy in bulk you'll receive greater discounts. While it may seem logical to purchase a small plan and then gradually progress towards a more comprehensive solution, doing this will limit your room for profit because you'll be paying a higher wholesale price. Although they may require a riskier investment, the largest reseller hosting plans give you the highest profit margins possible and are therefore the most desirable. With larger plans you'll be able to compete more easily, which will ultimately lead to a larger client base.